Everyone tries to save on taxes. So definitely, you aren’t alone on this earth who is looking for tax saving tips. But tax-saving has to be done in a legit way. You need to watch your steps while doing so or else, the government authorities are waiting for you. The good part is that it’s completely possible to shrink your taxes to minimal in a legal way.
You just have to figure out ways that help you keep the taxes to the bottom in a completely legitimate way. With a little planning, you could save on taxes and here are a few tips to get you started:
- Put Section 80C to Optimum Use
For a salaried employee, Section 80C comes as a saviour to help you save money on taxes. But to utilize its full potential, you need to understand every provision listed on Section 80C. Usually, it includes a series of expenses and investments that could help you claim a deduction of 1.5 lakhs in a financial year. From insurance premiums to pension contribution, house rent expenses to education loan installments, you could claim a variety of expenses against Section 80C to bring down your taxable income to the lowest.
- Emphasize on Investments and Not Just Tax Saving
Don’t aim just on saving taxes instead focus on investments that bring down the taxes to bottom. Emphasize on investments that secure your future in monetary terms while giving you a chance to claim a rebate on taxes. Some of these investments include employee provident funds, equity-linked saving schemes, fixed-deposit schemes, mutual funds and so on.
- Donate Money to NGOs to Claim Tax Rebates
As a social person, you might be donating money to NGOs. But do you know that you could claim a tax rebate on the charitable donation? However, the NGO you are dealing with must be listed with the authorities under Section 80G and should have a valid certificate. The money you donate to non-profit organizations could be adjusted to give you a rebate on taxes that give you peace of mind.
- Make Use of Your Savings Account
It is perhaps the easiest way around to cut down on taxes. The best part is that you don’t have to do anything special, just keeping money in your savings account would be enough to give you a tax rebate to some amount. For adults, maintaining the savings account to 10,000 rupees is an entirely tax-free while for senior citizens, this limit goes to 50,000 rupees per month. This rule comes under the Income Tax Act that a taxpayer could avail.
The Key Takeaway
Possessing a tax-saving mind isn’t bad, provided that you take only a legal way to save money on taxes. A salaried employee must be aware of salary breakups to utilize each section to claim tax rebates. If claimed wisely, Section 80C gives you a whopping rebate of 1.5 lakhs a year. You just have to know the exact breakups of your salary so that you don’t miss out on claims. A little more saving never hurts. Follow the tax-saving ideas mentioned here to save more tax this financial year.